Why the Trump administration plans to boost funding for subsea cables

Key takeaways

Undersea data cables carry the majority of the world's internet and financial data, making them critical to global communication and economy.
Ownership has shifted from public-private consortia to major tech hyperscalers, increasing the influence of private corporations in global infrastructure.
The security of undersea cables is vital, as they are vulnerable to sabotage and natural damage, which can have widespread disruptive effects.
Geopolitical competition, especially between the US and China, is evident in efforts to control and secure undersea cable infrastructure.
Diversification of cables and international cooperation are key strategies to improve resilience and security of undersea communication networks.

Summary

The Strategic Importance of Undersea Data Cables

The episode begins with an overview of the vital role undersea data cables play in global communications, handling 95-99% of all telecom data including internet, emails, and financial transactions. With nearly a million miles of cable crisscrossing the ocean floors, their strategic significance has increased, prompting national security concerns and geopolitical competition, particularly between the US and China. The US is actively planning to enhance its infrastructure by investing over $175 million to replace and secure these cables in the Caribbean and Central America, aiming to control critical data pathways.

Ownership and Control of Undersea Cables

Historically, these cables were built and operated by a mix of private and public sector consortia, including local telecoms and government bodies. Today, hyperscalers like Amazon Web Services, Microsoft, Google, and Meta are the main investors and operators, owning and maintaining a significant portion of the global underwater network. This shift reflects the increasing importance of tech giants in international infrastructure and raises concerns about security and sovereignty.

Security and Vulnerabilities of Subsea Cables

The discussion highlights the physical vulnerabilities of undersea cables, which are susceptible to sabotage, accidents, and natural disasters. About 200 damage incidents occur annually, with recent concerns around intentional attacks by ships in sensitive regions like the Baltic Sea and Taiwan Strait, linked to geopolitical tensions. Sabotage or accidental damage can cause significant disruptions, slowing internet traffic and affecting financial and communication systems, but diversifying and increasing the number of cables can mitigate some risks.

Geopolitical and Economic Implications

The episode explores how control over undersea cables is a geopolitical tool, especially with the US aiming to keep Chinese influence at bay by developing more secure and independent networks. Building resilient infrastructure in allied regions like the Caribbean is seen as a way to bolster both security and economic interests. The strategic focus also includes ensuring trusted equipment and hardware are used in the cables’ infrastructure to prevent espionage or sabotage.

Show notes

Most of the world’s internet traffic flows through underwater cables on the ocean floor. The wires are also responsible for some $10 trillion worth of financial transactions every day.

And because those cables hold so much data and carry so much money, they’re also a potential security threat. That may explain why the U.S. and China are vying for control over the technology — and why the Trump administration is ramping up spending to replace cables in the Caribbean and Central America.

Marketplace’s Meghan McCarty Carino spoke with Erin Murphy, the managing director for Asia at Redpoint Advisors, about why these cables play a key role in geopolitics.

More on this:

US is considering big boost to anti-China spending globally from The Associated Press

Risk Beneath the Waves: Safeguarding Subsea Cables for a Secure Global Network from CSIS